Public Service Board has questions about Vermont Yankee agreement

Posted
Friday, January 10, 2014 6:36 am

By BOB AUDETTE / Reformer Staff

BRATTLEBORO -- The Vermont Public Service Board has some questions pertaining to a settlement agreement recently reached between the state and Entergy, which owns and operates Vermont Yankee nuclear power plant in Vernon.

The Vermont Department of Public Service filed the agreement with the Public Service Board on Dec. 23, along with a suggested schedule for further proceedings before the board.

The PSB had been reviewing Entergy's application for a certificate of public good for operation of the power plant from 2012 to 2032. However, the PSB's review was put on hold pending the resolution of a lawsuit filed against the state by Entergy. That suit was resolved in favor of Entergy by a district court judge in January 2012 and later affirmed by an appeals court in August 2013. But on Aug. 27, 2013, Entergy announced it would be closing Yankee at the end of 2014, due to the plant's financial viability in an energy market depressed by the low cost of natural gas. Now the PSB is considering whether to issue a CPG for operation through Dec. 31.

While the PSB decided to adopt the suggested schedule proposed by the Department of Public Service, it has more than a dozen questions it would like answered.

Late on Thursday, the Department of Public Service submitted answers to those questions.

Chris Recchia, the commissioner of DPS, noted that despite previous fractious interactions between Entergy and the state, Entergy will be a "fair partner" going forward.

"The limited period of operation considerably diminishes the significance of questions regarding Entergy VY's previous conduct," he wrote. "Coupled with the clarity of the new (memorandum of understanding)," wrote Recchia, "fewer opportunities will exist for misunderstanding or reinterpretation of the commitments made to the State."

Recchia also credited "a noteworthy positive evolution in the commitment by high-level Entergy VY representatives to the state of Vermont" as a reason to trust Entergy will be a fair partner.

The board wondered if it had the authority to grant Entergy permission to store spent nuclear fuel on site or if the Legislature must approve expansion of the current storage facility.

"If the Board concludes it does not have the right to grant such approval, how does this affect the MOU?" asked the board. Previous dockets related to the sale of Yankee to Entergy, an increase in power production at the plant and the establishment of the storage facility all grant the PSB certain powers to enforce the obligations detailed in those prior agreements.

"How does the current MOU interact with those prior determinations?" asked the board.

Recchia wrote that the January 2012 court decision, which removed the Legislature from its self-authorized role of approval over Yankee's future, affirmed the PSB's authority to enforce those conditions. The court order also struck down a Vermont statute that limited the on-site storage of any spent fuel produced up to March 21, 2012, but not afterward.

"If money remains ... what happens to those funds?" asked the board, about the site restoration fund Entergy has agreed to seed with a $25 million downpayment.

Recchia wrote that Entergy plans to use any funds left over from radiological decommissioning to begin site restoration prior to tapping the newly agreed to fund. But pursuant to conditions in the as-yet-to-be-approved MOU, anything left over when site restoration is complete would be returned to Entergy.

Paragraph 12 of the agreement between Entergy and the state gives Entergy the right to challenge any state law on the grounds it is pre-empted by federal authority.

"How does this provision relate to Entergy VY's existing commitments from other dockets not to raise preemption challenges?" asked the board.

"The MOU is not intended to circumvent or eliminate any prior commitments made by Entergy VY to the Board or the State," wrote Recchia. "Entergy VY's reservation of its right to raise preemption challenges is subject to all relevant prior commitments by Entery VY."

And what of the MOU's condition that spent fuel be moved from the spent fuel pool "in a timely manner"? asked the board.

"The Settlement Agreement was filed with the Board for informational purposes," wrote Recchia. "The Department does not intend for the Board to rely on the Settlement Agreement in approving or disapproving the MOU."

While details in the settlement agreement related to spent fuel "express the intentions of the parties ... They do not represent binding obligations ..." wrote Recchia.

The board expressed concern over what appeared to be boiler-plate legal language in the agreement: "Nothing in the Agreement is intended to limit the authority of state agencies to require standards for site restoration commensurate with the standards most protective to the environment as employed at similar sites nationwide or required by law."

"Is this language intended to limit the authority of other state agencies of the Board to set standards more protective than those used at other sites?" wrote the board. "For example, could the Board determine that removal of all underground structures was necessary for complete site restoration?"

The language is intended to preserve the authority of both the Public Service Board and state agencies to set standards.

"The Board has the authority to condition a CPG on the removal of all underground structures," noted Recchia. "However, the Department, joined by (the Agency of Natural Resources) and (the Vermont Department of Health), is of the view that it would be premature to impose specific site restoration requirements ... before the detailed site assessment ... is completed."

The Department of Public Service and other state agencies will work with Entergy to establish a timeline and the standards for site restoration, noted Recchia, which will be submitted to the board for approval.

"(The study) will be performed well before any other study or consideration of site assessment issues that Entergy VY is required to undertake, thereby providing all stakeholders -- including the Board -- with better information earlier in the process, and better positioning the Board to exercise its authority, none of which is curtailed by the MOU."

The schedule includes a public hearing on Jan. 14 in Montpelier, and via Vermont Interactive Television, and technical hearings on Jan. 30 and 31.

If the board has not granted a CPG for continued operation and expanded storage of spent nuclear fuel by March 31, or doesn't approve of the new agreement, "each Party agrees that this Agreement may terminate ..."

Bob Audette can be reached at raudette@reformer.com, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.

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